Linux From Scratch - Version 6.1.1

Chapter 7. Setting Up System Bootscripts

7.11. Creating the /etc/hosts File

If a network card is to be configured, decide on the IP address,
FQDN, and possible aliases for use in the /etc/hosts file. The syntax is:

<IP address> myhost.example.org aliases

Unless the computer is to be visible to the Internet (i.e., there is
a registered domain and a valid block of assigned IP
addresses—most users do not have this), make sure that the IP
address is in the private network IP address range. Valid ranges are:

A valid IP address could be 192.168.1.1. A valid FQDN for this IP
could be www.linuxfromscratch.org (not recommended because this is a
valid registered domain address and could cause domain name server
issues).

Even if not using a network card, an FQDN is still required. This is
necessary for certain programs to operate correctly.

The [192.168.1.1] and
[<HOSTNAME>.example.org]
values need to be changed for specific users or requirements (if
assigned an IP address by a network/system administrator and the
machine will be connected to an existing network).

If a network card is not going to be configured, create the
/etc/hosts file by running: